A Complete Guide to Cyber Fraud

In the last twenty years, cyber fraud has become a major threat to people and businesses. The anonymity of the internet and the rise of sophisticated bots allow cybercriminals to exploit vulnerabilities at scale without revealing their identities. To put this in numbers: the cost of cybercrime worldwide was 0.86 trillion dollars in 2018. That’s expected to rise to 15.63 trillion dollars by 2029.

Cybersecurity and fraud teams must adopt new tools to fight rising cyber fraud. This guide will cover cyber fraud, its common types, and how DataDome’s solutions can protect your online business.

What is cyber fraud?

Cyber fraud is the term for all illegal online activities that deceive people or organizations. It leads to data losses, financial losses, and reputational losses. It’s a type of fraud that uses automated bots and the anonymity of the internet to target its victims. DataDome specializes in protecting businesses from bot-driven and AI-assisted cyber fraud.

The Difference Between Cybercrime, Cybersecurity, & Cyber Fraud

While often used interchangeably, these terms have distinct meanings:

1. Cybercrime: This broad category includes all illegal activities involving computers, networks, or digital devices. Examples include hacking, cyberstalking, data breaches, and malware distribution.
2. Cybersecurity: This refers to the practice of protecting systems, networks, and data from cyber threats. It involves strategies and technologies designed to defend digital assets against both cybercrime and cyberfraud.
3. Cyberfraud: A specific type of cybercrime, cyberfraud uses deception to steal sensitive or financial information for personal gain. It includes the various ways cybercriminals use the internet to commit fraud, such as credential harvesting, online scams, and credit card fraud.

Common Examples of Cyber Fraud

Cyberfraud comes in various forms. Each form targets a different vulnerability in digital systems and human behavior. Some of the most common examples are:

1. Account Fraud: Unauthorized access to user accounts to steal data, travel points, or money from your bank accounts. Learn more about preventing account takeovers.
2. Payment Fraud: Payment fraud uses stolen payment details to make illegal transactions. This type of fraud usually involves card cracking and/or carding.
3. Influence Fraud: Using bots to manipulate online metrics. This creates false impressions of popularity or pushes specific agendas. Learn more about influence fraud.
4. Click Fraud: Fake click on online advertisements to increase costs for businesses. Also to distort marketing metrics. To learn more, check out our article on ad fraud prevention.
5. Inventory Fraud: This fraud tricks buyers by manipulating product data. It disrupts operations and sales.
6. Phishing: Attempts to obtain sensitive data by impersonating trustworthy entities or individuals.
7. Identity Theft: Stealing personal information to impersonate someone else for financial gain or other malicious purposes. Also called identity spoofing.
8. Online Scams: Schemes that trick people into giving money or personal information.
9. Business Email Compromise (BEC): Sophisticated scams targeting businesses. Cybercriminals often impersonate executives or suppliers asking for fraudulent wire transfers.
10. Ransomware: Malicious software that encrypts a victim’s files. Ransomware often requires payment for decryption.

The Role of Bots in Cyber Fraud

Bots play a crucial role in modern cyberfraud operations. They allow fraudsters to automate and scale their malicious activities, because they can:

• Attempt thousands of online account logins using stolen credentials (credential stuffing).
• Generate fake clicks or views to manipulate online metrics.
• Scrape websites to gather personal information for use in identity theft.
• Execute high-volume, low-value transactions to test stolen credit card information.

The speed and scale at which bots operate make them particularly dangerous. They can cause significant damage before traditional security measures can respond. Discover more about the role of bots in cybersecurity.

The Dangers of Cyber Fraud

The impact of cyber fraud can be devastating for both individuals and businesses. First, it leads to financial losses through direct theft of funds or unauthorized transactions. Second, it leads to data breaches where companies lose sensitive customer information.

Third, it can lead to reputational damage because cyber fraud incidents erode customer trust. Fourth, there’s all the operational disruption that comes with cyber attacks. Finally, failure to protect against cyber fraud leads to compliance issues with data protection regulations and law enforcement.

How to Prevent Cyber Fraud

Protect your business from cyber fraud with a mix of technology, education, and best practices.

1. Use Advanced Cyber Fraud Protection: Use DataDome’s Cyberfraud Protection Platform. It stops account takeovers, credential stuffing, DDoS attacks, payment fraud, click fraud, and more.
2. Train Employees: Regularly train your employees on phishing, social engineering, and other fraud techniques.
3. Use Multi-Factor Authentication (MFA): Add an extra layer of security to account logins. This makes it much harder for unauthorized users to gain access.
4. Conduct Regular Security Audits: Perform frequent checks to identify and fix vulnerabilities. DataDome’s Discover tool can instantly detect unprotected domains.
5. Enable Real-Time Monitoring & Mitigation: Use DataDome’s real-time analytics to detect suspicious activities immediately and block them automatically.
6. Keep Software & Systems Updated: Regularly update all software and systems to ensure they have the latest security patches.
7. Use Strong, Unique Passwords: Implement a policy of strong, unique passwords for all accounts. Consider using a password manager.
8. Secure Your Network: Use firewalls and VPNs. Also encrypt sensitive and personal data to protect your network from unauthorized access.
9. Implement Email Security Measures: Use advanced email filters and authentication to reduce phishing emails and BEC risks.
10. Develop an Incident Response Plan: Create and update a plan for responding to cyberfraud. It must aim to minimize damage and recovery time.

How DataDome Protects Your Business

DataDome provides a suite of solutions that protect your business from bot-driven cyberfraud:

1. Bot Protection: Advanced bot detection and mitigation to stop automated threats in real-time.
2. Account Takeover Prevention: Sophisticated algorithms to detect and prevent unauthorized access attempts.
3. API Security: Protect your APIs from abuse, data scraping, and other malicious activities.
4. Mobile App Protection: Secure your mobile applications against fraud and abuse.
5. Real-Time Analytics: Gain insights into traffic patterns and potential threats with DataDome’s dashboard.
6. Customizable Rules: Tailor protection to your specific needs and risk profile.
7. 24/7 Managed Services: Expert support and monitoring to ensure continuous protection.

DataDome’s cutting-edge tech helps businesses fight cyber fraud. It secures your digital assets and builds trust with your users.

Conclusion

It’s vital to know the types of cyberfraud, the role of bots, and to reduce your risk of being a fraud victim by using advanced bot protection.

Remember, cybersecurity is an ongoing process. A strong cyberfraud prevention strategy requires regular audits and employee training. It also needs to stay up-to-date with the latest threats and protections.

Protect your business today with DataDome’s advanced cyberfraud protection solutions. Try our 30-day free trial or use our BotTester to see which bots can bypass your current defenses. Together, we can build a safer digital landscape for your business and customers.